The Guyana Manufacturing and Services Association (GMSA) has bemoaned the lack of availability of farming and industrial lands for locals but government says that the shortage is a result of too many applications for specific areas.
“We also have a challenge, many businesses are complaining about the availability of land. We need land in order to increase manufacturing and production,” GMSA President Rafeek Khan said as he spoke of challenges faced by the sector while addressing the association’s mid-year dinner, held at the Ramada Princess Hotel, at Providence, East Bank Demerara.
Vice President Bharrat Jagdeo, the guest speaker at the event, was also pressed on this issue during the question and answer segment of the dinner by an attendee. In response he noted that while there are lands, it is a fallacy that Guyana has unlimited open areas of land to be occupied.
“There is a fallacy that we have a lot of land… everybody comes to Guyana and say oh you have a lot of lands for agriculture and everything else. It is a fallacy. 86 per cent is covered with forest so we have 14 per cent remaining [and] when you take out savannah lands you are left with a very limited coastal strip.”
He added that while majority of lands in regions Two, Three, Four, Five, and Six are private lands, some of government’s road infrastructure projects will open up spaces for lands.
The Vice President, however, disclosed that they will have start looking at the possibilities of increasing the productivity of the land in every area. “We probably have to go higher very soon. We have already started going higher in the central areas because of the price of land in Georgetown. You can’t afford to buy a piece of land and put two stories any longer. You have to go higher and that is going to happen in the future…”
But while persons are requesting land, the VP pointed out that many persons who were given lands in the past, have not fully utilised the lands and in some cases have not used it as yet.
“We have had a lot of people who try to access land, they get the land but they don’t do anything. We have seen this in the old industrial estate, you drive through and see empty plots. They take the lands and don’t do anything with it. So we have now a rigid take-back clause. If you don’t proceed with a project in a particular period we take it back.”
The issue of land comes even as government has allocated plots to the Caribbean Community for persons who wish to come and farm here. President Irfaan Ali during the Agro-Fest in May announced that the government has made 50 acres of land available to young people in Barbados to advance food production. Trinidad and Tobago was also previously given the offer to access farming lands here.
“These farms will be working together in an integrated way to supply the market here. We are working on training your butchers here so that they can do the best cuts and Barbados can work on creating that logistics hub, moving these products on along the market chain. These are the types of initiatives that would bring long term and create long term sustainable relationships to what we are advancing and the path we’re taking,” Ali disclosed during the announcement in Barbados.
‘Growth’
Jagdeo nonetheless said that government will be looking at ways in which they can help small businesses take their products mainstream.
With the quality and type of products being produced by Guyanese manufacturers, Jagdeo said he believes the companies can grow into US multimillion dollar companies.
Moreover, Khan in his address also called for the access to finance and the setting up of a revolving fund.
He stated that limited access to favourable financing continues to be a major hindrance to growth of businesses in the sector.
“A revolving fund would be key in addressing this ongoing major setback faced by predominantly small- and medium-size companies,” Khan emphasised while lamenting that the availability of capital from local and international banks continues to be a challenge.
Nonetheless, Khan said, they have seen small changes, which are encouraging. Lending has increased by approximately 8 per cent, which is a favourable sign that the economy is improving, and banks are loaning more, he noted.
Jagdeo, in response to the call, however, stated that while government is open to being liberal in the licensing of non-depository financial institutions, the private sector should look at taking steps to access new means of financing and setting up accounts to show accountability within the company structure.
He also stated that companies should look at the possibilities of expanding via going public to raise money to support their ventures.
“So it’s not just about the government providing a fund to businesses, which could happen in the future once the resources are available, but it’s about the private sector taking steps to improve its own accountability at the company’s level and opening up its horizon in terms maybe accessing financing of a different nature… so we’re open to the idea but much more work needs to be done at that level,” Jagdeo contended.
The Vice President stated that government has been looking at means by which they can increase the flow of financing to local companies. On this point he noted that Dr Ashni Singh will be meeting with bankers to iron out and find resolution for the persistent concerns.
He dropped hints that the government is prepared to even make changes to the supervisory rules of the banking sector in a bid to remedy the situation.
“We are looking at this. We may even need to change the bank supervision rules but if the current commercial banks are not fit-for-purpose or they are not aggressive enough, we have already licensed one new merchant bank,” he noted.
It was at this point that he informed the gathering that the country has received many applications for several merchant banks. The government has already approved the application of one such financial institution, New Haven, which is owned and operated by Floyd Haynes.
“We are creating the framework for that. That would allow our people particularly the private sector to access more opportunities and effectively utilise those opportunities by reducing administrative burden, creating the avenues for greater sources of financing and providing the infrastructure necessary for them to grow if they put the energy into it,” Jagdeo boasted.
Among the other issues plaguing the sector, according to Khan, are skills shortages and transportation to export products regionally.
He added that the need for human resource has grown this year as the oil and gas sector increases its demand for human capital.
In the matter of requiring containers for regional export, he said that while regional exports are expected to drastically increase, the need for less-than-container-load (LCL) freight services need to be available. Likewise, the need for increased air-cargo services is required.
Notwithstanding the challenges in the sector, Khan pointed out that natural resources from activities such as gold, quarrying, and sand mining are expected to see positive growth this year.
Quarrying activities, he said, are expected to increase with the issuing of 10 new quarry licences. The current demand is pegged at approximately 1.5 metric tonnes (MT) per annum, with local production currently around 600 MT.
In the area of forestry, production has been up by 25% and exports up by 30% compared to the previous year. This, he said, is a good outlook for the sector.
With the construction of six new regional hospitals, he said, the local pharmaceutical industry stands to benefit from significant increase in demands for drugs.
Additionally, Khan also posited that food security and housing will be a major driver of the country’s economy for the next decade and beyond. He stated that the growing demand for food supply in Guyana and the Caribbean will give businesses the assurance to invest further and build more capacity for agro-processing.
According to him, the demand for housing will see a ripple effect for business opportunities for many other sectors, including services.
With the government’s gas-to-shore project slated to come on stream by 2025, he said, competitiveness is expected to increase from both old and new companies.
“Guyana has been for too long a primary producing economy but gradually shifting to secondary and tertiary. This is where you see real growth in the economy by focusing on value-added,” Khan highlighted.
